Ralph Gomory explains comparative advantage once again and also calls cash on the latest nonsense in trade policy suggestions from the Financial Times claiming Japan should abandon manufacturing and is the cause of Japan's financial malaise.
Ignored in all these discussions is the obvious fact that when you don't make for yourself the things you need, you will have to trade for them. If you have to import cars and all sorts of manufactured goods, you will be importing on a large scale; to trade for them you will need to create additional goods or services that you can export on an equally large scale.
Duh. Why is it experts, such as Ralph Gomory, are required to point out the obvious.....uh, a sector which provides ~2% of national exports isn't exactly equal to another sector which provides 53% of exports, in current practice and in market potential.
I suggest reading the entire post.
Gomory likes allegory, extended metaphor and symbolism, as if he is talking to children. I dare say from some of the insane nonsense I see on trade pieces, I suspect he is talking to children. Over and over basic concepts of Ricardo's comparative advantage theory are not understood.
Gomory uses following the herd analogies as symbols of corporate trade religiosity. Incomprehensible dogma corporatists who seemingly did not pass basic algebra are herds of sheep and us poor working stiffs are herds of goats. To honor theriomorphism, please view: